Using your phone to Facebook ‘friend’ a person you’ve just met is a frustrating experience –carefully spelling out names, looking through the photo list to find yourself, etc. Well, Facebook appeared to find a solution in the form a new app — Find Friends Nearby. An app that uses GPS to let you select from a list of nearby Facebook users. TechCrunch was tipped off this past weekend to the new app — initially known as “Friendshake”. The app had been quietly rolled out with no announcement. The app seemed like a useful tool for exchanging contact information with one or multiple people with minimal effort. So why did Facebook kill it only a few hours later?

When the media caught wind of the app, it was quickly dubbed it the “facebook stalking app” because of privacy concerns. That’s because when you were signed into Find Friends Nearby, you see a list of all Facebook users in the vicinity who were also signed into the app. Anytime an app uses GPS to tell strangers that you’re nearby, it’s going to raise questions about privacy. This led to a barrage of media fire. Quite frankly, I think most of the hype was overblown. That’s because once you left the Find Friends Nearby page, you stopped broadcasting your location. Facebook says it wasn’t a formal release —just something that a few engineers were testing. While that might be the truth, it’s hard to believe it didn’t pull the app partly because of the privacy issues raised by the press. Don’t get me wrong; there are valid concerns over how Facebook might use geolocation features in the future. But this was hardly a “stalking app.”

Facebook is in a no-win situation when it comes the vital issue of privacy – and that’s a big vulnerability, even for a mammoth of its size, especially considering all the user mining they’ll have to do for the foreseeable future to maintain their share value. The problem this illustrates for Facebook is that they’ve premised their phenomenal valuation on the marketing value of their users – but it turns out these users are extremely resistant to any new marketing tools that Facebook wants to target them.

As it relates to the “facebook stalking app” specifically, in hindsight, Facebook probably should have known it would be a controversy. By quietly releasing the app, it made the company seem like it was keeping a secret, which of course the press jumped on.